WP-2002-002
Analysis of the Bush Proposal to Reduce the SO₂ Cap
A. Denny Ellerman
February 2002

This paper evaluates President Bush's recent proposal to reduce the cap on total SO₂ emissions using a model of emissions banking that fits the experience so far under Title IV. It provides a brief introduction to emissions banking and reports results concerning the effect of a the proposed reduction of the cap on emissions, abatement costs, and the value of the existing SO₂ allowance endowment.